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Protect What Matters Most

A Merlin Insurance Guide

The Essentials of Personal Cover

Let’s break it down. There’s no one-size-fits-all when it comes to insurance, so here are the main types to consider:

Life Insurance

Think of this as a gift to your loved ones. If you pass away or are diagnosed with a terminal illness, life insurance pays a lump sum to help cover things like:

  • Debts

  • Funeral costs

  • Living expenses

  • Your family’s future lifestyle

 

It's peace of mind that they’ll be okay—even when you’re not around.

TPD Insurance

If an injury or illness means you’ll never work again, Total & Permanent Disability (TPD) insurance gives you a financial cushion.

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Depending on the type of policy, you may be covered if:

  • You can’t return to any job you’re suited for

  • You can’t go back to your specific job

  • You’re unable to care for yourself independently

 

This lump sum helps you cover medical bills, rehab, and day-to-day expenses—so you can focus on what matters.

Income Protection

If you’re too sick or injured to work, income protection helps replace a portion of your income—usually up to 70% of your salary.

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Key things to know:

  • Waiting period: How long before payments start (e.g. 30, 60, or 90 days)

  • Benefit period: How long you’ll be paid (e.g. 2 years, 5 years, or until age 65)

  • Tax: You can usually claim premiums as a tax deduction, but benefits received are taxable income

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If you’re self-employed or the main earner, this is a must-have.

Trauma Insurance

Serious illnesses like cancer, stroke, or heart attack don’t just take a physical toll—they often come with huge medical bills and time off work.

 

Trauma insurance pays you a lump sum right after diagnosis, giving you the breathing room to recover without worrying about money. You can even add child trauma cover to protect your kids.

Business Expenses Insurance

Running your own business? What happens if you’re out of action?

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This cover helps keep your business ticking by covering things like:

  • Rent

  • Utility bills

  • Office expenses

  • Accountant fees

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You may also want to insure business partners or key staff. If they can’t work due to illness or injury, your business won’t be left scrambling.

How Much Does It Cost?

Insurance premiums vary based on:

  • Age

  • Gender

  • Health and medical history

  • Occupation

  • Smoking status​

​You can choose how your premiums are structured:

  • Stepped premiums start lower and increase with age

  • Variable premiums cost more early on but remain more stable over time

Where Should You Hold Your Cover?

You can own most policies either personally or through your super fund.  Here’s a quick comparison:​

Policy in Personal Name

​Premiums

  • Paid from your after-tax income

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Tax Deductibiliy of Premiums

  • Only income protection is tax deductible

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Claims Payment Taxable

  • Often tax-free, except income protection

Policy in Super

Premiums

  • Paid via contributions or from super​​

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Tax Deductibiliy of Premiums

  • Deductible to the super fund​

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Claims Payment Taxable

  • May be taxable

What’s the Process Like?

When applying, you’ll fill out a health questionnaire—maybe even a quick check-up. Based on your history, the insurer might:

  • Offer standard cover

  • Add a premium loading

  • Exclude certain conditions (e.g. pre-existing injuries or risky hobbies)

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But here’s the good news: many policies are guaranteed renewable, so once you're covered, you’ll stay covered—even if your health changes.

Final Thought

Insurance isn’t about expecting the worst. It’s about being ready for it—just in case.

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Your plan should be tailored, flexible, and affordable.

 

Whether it’s protecting your family, your income, or your business—we’ll work with you to make sure you’re covered, your way.

Next Read: Have you got enough insurance?

More RiskWizardry from Merlin

Insurance Guides

Insurance essentials

Protecting what matters most

Have you got enough insurance?

Understanding insurance (coming soon)

Latest Updates & Insights

Tools and Calculators

Coming Soon!

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Copyright © 2026 Merin Financial Services Pty Ltd. All rights reserved.​

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General Advice Warning

 

Merlin Financial Services Pty Ltd ATF Claudio Tan Family Trust, Corporate Authorised Representative No. 1315582) and all our advisers are Authorised Representatives of Finchley & Kent Pty Ltd, Australian Financial Services Licence No. 555169, ABN 50 673 291 079, and has its registered office at Level 63, 25 Martin Place, Sydney NSW 2000.​ Finchley & Kent Pty Ltd Australian Financial Services Licence applies to financial products only. Please note that Property Investment, Tax & Accounting, Mortgages & Finance are not considered to be financial products.

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Disclaimer: The information contained within the website is of a general nature only. Whilst every care has been taken to ensure the accuracy of the material, Merlin Financial Services Pty Ltd ATF Claudio Tan Family Trust and Finchley & Kent Pty Ltd will not bear responsibility or liability for any action taken by any person, persons or organisation on the purported basis of information contained herein. Without limiting the generality of the foregoing, no person, persons or organisation should invest monies or take action on reliance of the material contained herein but instead should satisfy themselves independently of the appropriateness of such action.

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